Lamar Advertising to redeem 9¼% '07 notes

Lamar Advertising Co. (Ba2) said Thursday (Sept. 26) that its wholly-owned Lamar Media Corp. (B) subsidiary will redeem all of its approximately $74 million of outstanding 9¼% senior subordinated notes due 2007 on Oct. 25. Lamar, a Baton Rouge, La.-based outdoor advertising company, said that the notes would be redeemed for a redemption price equal to 104.625% of the principal amount of the notes (i.e. $1,046.25 per $1,000 principal amount), plus accrued and unpaid interest up to the redemption date, under terms of the notes' indenture. Lamar plans to fund the redemption out of cash on hand and additional borrowings.

Ocwen Financial, subsidiaries, calling three series of notes

Ocwen Financial Corp. (Ba1) said on Thursday (Sept. 26) that it will exercise its redemption option to call $40 million of its 11 7/8% notes due 2003, out of the $86.3 million of the notes that were outstanding as of June 30. Ocwen, a West Palm Beach, Fla.-based financial services company, will exercise its call privileges at a price of 102.969% of par (i.e. $1,029.69 per $1,000 principal amount), as provided for in the terms of the notes' indenture. It estimates that this action will reduce its interest expense by approximately $4 million over the remaining life of the notes, and will result in approximately $2.2 million of net cost savings during that period.

Ocwen also said that its wholly owned Ocwen Federal Bank FSB subsidiary will exercise its redemption option to call $33.5 million of its 12% subordinated debentures due 2005, out of the $67 million of these debentures that were outstanding as of June 30. The bank will exercise its call privileges at a price of 102.667% of par (i.e. $1,026.67 per $1,000 principal amount), as provided for in the terms of the debentures' indenture. Ocwen estimates that this action will reduce its subsidiary's interest expense by approximately $4 million over the next 12 months, and will result in net cost savings of approximately $2.5 million during that period.

Ocwen further announced that another wholly owned subsidiary, Ocwen Asset Investment Corp., will redeem the $45,000 of its 11.5% notes due 2005 that remain outstanding following the tender offer that the company executed in December 2000. It will exercise its call option at a price of 105.75% (i.e. $1,057.50 per $1,000 principal amount) as provided for in the terms of the notes' indenture. This action will fully retire this series of notes and eliminate the associated administrative requirements. No material impact will result from this transaction.

Jefferson Smurfit completes 9¾% '03 notes tender

Smurfit-Stone Container Corp. said on Thursday (Sept. 26) that its wholly owned indirect subsidiary Jefferson Smurfit Corp. (U.S.) had completed its previously announced tender offer for its outstanding 9¾% senior notes due 2003, which expired as scheduled at midnight ET on Tuesday (Sept. 24) without extension. As of that deadline, approximately $473.7 million principal amount, or 94.7% of the outstanding 9¾% notes, had been validly tendered and not withdrawn. All of the notes that were tendered to the company were accepted for purchase.

Smurfit-Stone also announced that JSC (US) had closed its previously announced private placement $700 million offering of 8¼% senior notes due 2012, a portion of the proceeds of which were to be used to fund the tender offer. Morgan Stanley (call 877 445-0397 or 800 223-2440 ext. 2492) was the dealer-manager for the tender offer. D.F. King & Co., Inc. (bankers and brokers call collect 212 269-5550, others call toll-free 800 714-3312) was the information agent; international inquiries should be directed to D.F. King (Europe) Ltd. at (44 207) 920-9700.

AS PREVIOUSLY ANNOUNCED, on Aug. 27, Smurfit-Stone Container, a Chicago based maker of paper packaging formerly known as Stone Container Corp. before its acquisition several years ago by Dublin, Ireland-based paper packaging maker Jefferson Smurfit Group plc. (B2/B), said that its Jefferson Smurfit Corp. (U.S.) subsidiary was beginning a tender offer for its $500 million of outstanding 9¾% notes, as well as a related solicitation of noteholder consents to proposed indenture changes, which would eliminate substantially all restrictive covenants and certain event of default provisions. The tender offer was undertaken as part of a previously announced larger series of transactions which will see Smurfit-Stone Container Corp.'s parent company sold to U.S. equity investment firm Madison Dearborn Partners Inc. for $3.6 billion. As part of that transaction, Jefferson Smurfit Group will spin off its 29.3% stake in Smurfit-Stone Container.

The company set a consent deadline of 5 p.m. ET on Sept. 6, and said the tender offer would expire at 5 p.m. ET on Sept. 24, with both deadlines subject to possible extension. Smurfit-Stone said it would set the consideration to be paid for the notes based on a 75 basis-point fixed spread over the yield of the reference security, the 5½% U.S. Treasury Note due March 31, 2003. The total consideration payable to those holders who tender their notes by the consent deadline will include a $30 per $1,000 principal amount consent fee (which would not be payable to holders tendering their notes after the consent deadline). All noteholders would also receive accrued interest on their notes up to the settlement date. The tender offer would be conditioned upon - among other things-the satisfaction of a requisite consents condition and a financing condition, each of which is described in more detail in the official Offer to Purchase and Consent Solicitation Statement.

On Friday Sept. 6, Smurfit Stone Container said that Jefferson Smurfit Corp. (U.S.) planned to issue $700 million of new 10-year senior notes in a Rule 144A private placement transaction involving qualified institutional buyers, a portion of the proceeds of which would be used to repurchase the outstanding 9¾% notes under the previously announced tender offer. High yield market syndicate sources indicated that the new bonds would likely price on Wednesday (Sept. 11). The company said that the new notes would be guaranteed by JSCE, Inc., a wholly-owned subsidiary of Smurfit-Stone and the sole stockholder of Jefferson Smurfit Corp. (U.S.), and would rank equally with all of the latter's other senior unsecured indebtedness. The notes will not be registered under the Securities Act of 1933, and, unless so registered, may not be publicly traded in the U.S., except under circumstances allowed by the Securities Act and applicable state securities laws. Jefferson Smurfit said that it had agreed that after the issuance of the new notes, it would file a registration statement relating to an exchange offer for the notes under the Securities Act.

Later that same day (Sept. 6), Smurfit-Stone Container said that as 5 p.m. ET, the previously announced consent solicitation relating to the 9¾% notes - part of the tender offer for those notes - had expired. As of the deadline, Jefferson Smurfit had received tenders of notes and related consents from the holders of approximately 94.5% of the outstanding principal amount of the notes, an amount sufficient to amend the notes' indenture. The company said it planned to promptly execute a supplemental indenture incorporating the proposed amendments to the indenture, which would become operative when the company accepts for payment the notes tendered under its offer.

On Sept. 10, Smurfit-Stone Container said that Jefferson Smurfit Corp. (U.S.) had arranged the previously announced sale of $700 million of new 10-year senior notes in a Rule 144A private placement transaction involving qualified institutional buyers, with a portion of the net proceeds slated to be used to repurchase the 9¾% senior notes under the previously announced tender offer and related consent solicitation, and the remaining proceeds expected to fund a portion of the purchase price relating to the previously-announced acquisition of a Stevenson, Ala. mill from MeadWestvaco Corp.

On Sept. 20, Smurfit-Stone Container said that Jefferson Smurfit Corp. (U.S.), had set the pricing for its 9¾% note tender offer and related consent solicitation, setting the consideration for the notes at $1,037.693 per $1,000 principal amount of notes tendered, minus an amount equal to the consent payment of $30 per $1,000 principal amount of notes. The consent payment would be paid as part of the total consideration only on those tendered notes for which consents were validly delivered and not revoked prior to the now-expired consent deadline. Holders of all notes are to also receive accrued interest payable up to, but not including, the settlement date.

Loral amends, extends preferred stock exchange offer

Loral Space & Communications said on Wednesday (Sept. 25) that it had amended and extended its previously announced exchange offer of its outstanding preferred stock. That offer, which was to have expired at midnight ET on Sept. 24, will now expire at 11:59 p.m. ET on Oct. 8, subject to possible further extension.

Under its improved offer, Loral is offering to exchange $1.92 in cash and 6.54 shares of Loral common stock for each share of its Series C and Series D preferred stock (this represents an increase from the four shares of common stock in the original offer; there is no change in the cash portion of the offer). Further, the company has removed its condition of 50% minimum participation, in the aggregate, of all outstanding shares of the two series of preferred stock.

Loral added that it does not expect to offer any further improvements to the economic terms of the offer. The company explained that the terms of Loral's bond indenture prevent it from increasing the cash component of this offer, and New York Stock Exchange rules preclude Loral from issuing more common shares without shareholder approval. Moreover, said Loral, the originally announced indefinite suspension of dividends for both series of preferred stock will apply to the dividends that otherwise would have been paid in November. Accordingly, the company will be prohibited from offering cash in future preferred exchanges.

Loral said that if all of the preferred shares participate, it will exchange $22 million in cash and 75.1 million common shares for preferred stock that has a liquidation preference of $574 million (an increase in the total number of common shares to be offered from the originally announced 45.9 million). It said that as of the close of business on the original expiration date, Sept. 24, some 286,440 shares of Series C preferred stock and 1,132,700 shares of Series D preferred stock had been tendered. Morrow & Co., Inc. (call 800 607-0088) is the information agent for the offer; exchanges will be effected by The Bank of New York, the exchange agent for the offer.

AS PREVIOUSLY ANNOUNCED, Loral Space & Communications, a New York-based manufacturer of communications satellites and provider of related satellite services, said on Aug. 27 that it had begun an offer to exchange cash and common shares for all of its outstanding preferred stock, as part of its ongoing strategy to reduce debt and increase its financial flexibility. Loral said it would exchange $1.92 in cash and four shares of Loral common stock for each share of its Series C and Series D preferred stock (the equity component of the exchange offer was subsequently increased). The initial offer represented a total of $3.96 (in cash and common stock) for each share of Series C and D preferred stock, based on Aug. 27 closing price of $.51 for Loral common. Loral said that as of June 30, it had 8,084,174 shares of the Series C preferred stock and 3,391,688 shares of the Series D preferred stock outstanding. If all of the preferred shares were to be exchanged under the offer, Loral would exchange $22 million in cash and 45.9 million common shares (the latter figure was subsequently increased) for preferred stock having a liquidation preference of $574 million.

Loral set 12 midnight ET on Sept. 25 as the expiration deadline for the offer (this was subsequently extended). It said the offer would be contingent on participation of a minimum of 50%, in the aggregate, of all outstanding shares of the two series of preferred stock. In connection with this financial strategy, Loral's Board of Directors approved a plan to suspend indefinitely the future payment of dividends on the two series of preferred stock. Accordingly, Loral will defer the payment of quarterly dividends due on its Series C preferred stock on Nov. 1 and due on its Series D preferred stock on Nov. 15; however, dividends on the two series will continue to accrue.

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